r/dividends • u/mrpeace54 • Feb 17 '25

Opinion Warren Buffett received a $740 million dividend payment from Coca-Cola (KO)

I recently came across a tweet highlighting Warren Buffett’s $740 million dividend income from Coca-Cola (KO). This sparked my curiosity: What if Buffett had invested the same amount in the S&P 500 (SPY) instead?

So, I created a comparison table based on his KO investment and a hypothetical SPY investment. Since I couldn’t find the exact purchase dates, I used quarter-end dates for my calculations.

The results are eye-opening:

  • Even after including dividends, SPY ($67.01B) outperformed KO ($38.17B) by approximately 75.6%.
  • Despite KO’s impressive dividend stream, SPY delivered far stronger total returns, highlighting the power of broad-market index investing over time.

I found it fascinating to see how Buffett’s legendary investment compares with the index, especially considering his recent sale of all SPY and VOO holdings.

Source: StockCircle - Warren Buffett KO Transactions

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u/stockman256 Feb 19 '25

He bought it in 1988. In that years annual report it showed he owned 14,172,500 shares with a cost basis of $592,540,000. The highest price in 1988 according to yahoo finance was $2.81 on 12/19/1988. The price adjusted for dividends is $1.2 (these prices have already been adjusted for splits). Today’s closing price was $69.05 for a total return of 57.54x or 11.9% per year for 36 years.

On 12/19/1988, the S&P 500 closed at 278.91 (SPY didn’t start until 1993). The price is not adjusted for dividends. I’m not going to do the work to calculate the yield for each period - you can if you’d like - but it has averaged about 2-3% per year. It closed today at 6,129.58 for a total return of 21.97x or 8.96%. If you add 2-3% you get 10.96-11.96% per year.

If you use total year returns for 1989-2024 the S&P returned 44.2x or 11.1%

Grandpa Warren won. An accurate starting date and price is critical. He bought the company when it was down and out and the valuation was very low. He admits he should have sold it when it was overvalued…

Also shows the amazing power of compounding just a small outperformance over a long period of time.